The mobile video audience may still be small, but that doesn't mean advertising in the emerging category isn't gaining ground. More than 200 Fortune 500 brands including Dell, Toyota and Kraft in 2010 ran mobile video campaigns, up from just 25 a year ago. In the fourth quarter alone, 70 major brands ran mobile video ads, according to a new report from mobile ad network Rhythm NewMedia.
Overall, Rhythm served 535 million average monthly content views through its network in the quarter, up 26% from the third quarter.
Completion rates for pre-roll video ads remain high, at 88%. Mobile video is also proving stickier than its Web counterpart. Retention rates for non-video ad content are even higher, at 81% after the first 60 seconds. That compares to a 56% retention rate for online video.
Looking at industry segments, automotive was the leading category in the fourth quarter, accounting for nearly 30% of total ad revenue on Rhythm's network. Second to automotive was telecom, generating about 17% of revenues -- followed by CPG, about 14%, travel and hospitality, 12%, and entertainment, 10%.
In the battle for audience between apps and the mobile Web, apps are winning when it comes to video. Video views per unique user are more than five times higher than on the mobile Web, at 11 monthly views on average versus two. No doubt this is welcome news for Apple, which has used apps to create demand for its mobile devices.
With its 10-inch screen, the iPad is already driving higher click-through rates than its smaller cousins. The Apple tablet has CTR of more than 2% on interactive pre-roll ads compared to 1.5% on the iPod touch, about 1% on the iPhone and more than 0.5% on Android phones.
Across devices, Rhythm has found that calls-to-action in ads like "tap to video" and "view more" help to generate higher CTRs. The average full-page ad, for instance, has a 3.7% click rate. That figure jumps to 6% when the ad contains a written call to action.
Publishers in Rhythm's network include broadcast TV networks, 10 of the top 25 cable networks, the largest news agency, and other entertainment, news, games, sports, lifestyle and music sites and apps. In addition to pre-rolls, it serves full-page, banners and ads that launch when an app is opened.
Mobile video as a whole is still far from mainstream. Only about 10% of the 229 million U.S. mobile phone users ages 13 and over were watching mobile video in the second quarter of 2010, according to Nielsen. That total was up 43% from about 15 million a year ago. Mobile video ad revenue in the U.S. was estimated at just $35.1 million in 2010, expected to grow to $206.3 million by 2014, according to eMarketer. Overall mobile video revenue is predicted to increase from $548 million in 2010 to $1.3 billion in 2014.